Keeping the exchange process simple for you! |
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Bank Scares and Boogeymen
And How To Keep Your Exchange Secure
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There are so many ways to lose money. Scares from bank failures this month have put this in focus. So, how can you keep your exchange funds secure? Real estate in a 1031 exchange is often a client’s largest asset outside of their personal residence, so the safety of client exchange funds and sensitive information is a critical consideration when selecting a Qualified Intermediary (QI). A missed deadline can derail a 1031 exchange, but scammers, wire fraud, bank failure, QI insolvency, and plain errors or omissions can leave an exchange taxpayer high and dry. A reputable QI should hold client safety as paramount in their responsibilities in the exchange process.
Client safety includes planning for risk management, knowledge of the exchange process, vigilant observation as an exchange progresses, verification procedures, secure systems, and transparency. As a potential exchanger, you need to trust that your QI is doing everything possible to make you feel comfortable with the process.
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When considering a 1031 exchange, security of your assets should be the highest priority.
A Qualified Intermediary should know their customer, be vigilant for red flags, and implement best practices, such as segregated exchange accounts, strong cybersecurity, and options for FDIC insurance coverage.
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1031 Exchanges Made Easy
Thursday, April 6, 2023
12:00 PM Eastern
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1031 CORP. provides an easy-to-follow overview of 1031 tax-deferred exchanges and their many benefits. We'll also review the requirements of a successful exchange and the essential role of 1031 CORP. to keep the exchange transaction simple for all parties and wrap up with questions and answers. |
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Administration’s FY 2024 Budget Proposal Caps, Cripples 1031 Exchanges |
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Even though Section 1031 has many legislative supporters, Members of Congress regularly misunderstand the purpose and positive impacts of Section 1031.
Your voice and story can help explain the benefits.
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President Biden’s FY 2024 budget proposal, released March 9, calls for “closing tax loopholes that overwhelmingly benefit the rich and the largest, most profitable corporations. This includes closing the so-called ‘like-kind exchange loophole’ that lets real estate investors defer tax indefinitely… to ensure that the ultrawealthy cannot use these incentives to amass tax free fortunes.” While the verbiage suggests a repeal, the proposal is technically a cap on the deferral of capital gains at $500,000. The effect of the proposal is the same—Section 1031 like-kind exchanges would not be available for many real estate transactions. Exchanges of property with gains above that amount would be taxed at normal capital gains rates. The proposal seeks to raise $19B in tax revenue over 10 years through the cap on 1031 deferral. In contrast, however, preservation of like-kind exchanges generated $13.1B in federal, state, and local tax revenue and contributed $97.4B in value-add to the national GDP in 2021 alone.
The power of Section 1031 like-kind exchanges extends beyond the value of the immediate tax deferral, allowing flexibility for real estate investors and business owners and promoting tangible benefits in our communities.
Please advocate for the preservation of Section 1031 and the role of Qualified Intermediaries by sending a letter to your Member of Congress through the Federation of Exchange Accommodator’s advocacy website at www.1031buildsamerica.org/take-action. Please share it among your contacts as well.
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Schedule a 1031 Presentation |
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The 1031 CORP. Exchange Team is available to present seminars, webinars and continuing education courses on 1031 exchanges, their many benefits and the requirements of a successful exchange to your association or groups.
Our team will tailor the presentation to your audience and time schedule.
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Cindi Platt-Elliott, CES®
1031 CORP.
Senior Exchange Officer,
Certified Exchange Specialist®
Collegeville, Pennsylvania
(610) 792-4880 ext. 216
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Cindi Platt-Elliott, CES®
Role: Senior Exchange Officer, Certified Exchange Specialist®
Location: Collegeville, Pennsylvania
Contact Info: (610) 792-4880 ext. 216
Specialties:
- Complex exchanges
- Farm and ranch
- Mixed-use properties
- Fractional interests (DSTs, TIC sales)
- 1031 exchange educator
What advice can you give a client starting a 1031 exchange?
Planning ahead is key. The 45 and 180-day deadlines are short timeframes and can loom without preparation. But, an exchange doesn’t have to be a stressful experience! Our Exchange Team goes out of our way to accommodate and often initiates exchanges at the closing table. However, a conversation ahead of time can help clients understand the process and open opportunities the Exchanger hadn’t considered otherwise. Sellers considering a 1031 should call when they first start thinking about selling their investment property, and critically, before closing. We can walk through your goals with you, which can be the foundations for finding the right property and a successful exchange.
How is “trust” an important function or element in your work at 1031 CORP.?
Our highest priority is the security of our clients’ funds. We want you to feel comfortable trusting your money and assets with us. There’s a focus on knowing and following regulations, transparency, and lots of direct contact in the exchange process. When strangers call, they don’t know us from Adam, so we have to earn their trust. We take extra time to explain our security policies and keep a close eye for red flags during the exchange process. We see lots of repeat business because of that peace of mind.
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Serving as a nationwide Qualified Intermediary for 1031 tax-deferred exchanges since 1991, 1031 CORP. strives to provide an exceptional exchange experience for our clients and their advisors. We provide our clients with enhanced security of funds, knowledgeable exchange professionals and a commitment to keep the exchange process simple for our clients and their advisors. Our Exchange Team, which includes Certified Exchange Specialists®, has the experience and expertise to facilitate even the most complex exchange transactions, including reverse and improvement exchanges.
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